9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 903 - HC - Service TaxWaiver of pre deposit - penalty under Sections 76, 77 and 78 - Whether, the learned Tribunal should have, on the facts and in the circumstances of this case, directed pre-deposit of 25% of the duty demanded - Held that - Under Section 35F of the Central Excise Act, 1944, a person desirous of preferring an appeal against any order relating to any duty demand or penalty is liable to deposit the duty demanded or the penalty imposed with the Adjudicating Authority. However, where the Appellate Tribunal is of the opinion that the deposit of the duty demanded or penalty levied would cause undue hardship to such person, the Tribunal might dispense with such deposit, subject to such conditions as the learned Tribunal may deem fit to impose, so as to safeguard the interest of the Revenue. - There can be no doubt that undue hardship not only covers payment under compulsion where the appellant has a strong prima facie case, but also where the appellant has an arguable case. Where an appellant makes out a very strong prima facie case, and the Appellate Authority is satisfied that the demand is ex facie unsustainable in law, the requirement of pre-deposit may unconditionally be dispensed with. Where however, the prima facie case is not that strong, the interest of the revenue would necessarily have to he secured, and the appellant would have to be put to terms. - Decided conditionally in favour of assessee.
Issues:
Appeal against Stay Order and subsequent Orders by Customs Tribunal regarding Service Tax liability and penalty. Analysis: 1. The appellant, a partnership firm engaged in steel fabrication, was issued a Show cause-cum-Demand Notice alleging short payment of Service Tax. The Commissioner confirmed the demand and imposed penalties. The appellant appealed to the Customs Tribunal, seeking dispensation of pre-deposit. 2. The Tribunal, in its initial order, directed the appellant to pay 25% of the duty involved, which was later detailed in a judgment. The appellant filed a miscellaneous application contending misinterpretation of balance sheets and turnover. The Tribunal, in a subsequent order, rejected the application and dismissed the appeal for non-compliance with the pre-deposit directive. 3. The key issue in this appeal was whether the Tribunal should have directed pre-deposit of 25% of the duty demanded. The Tribunal found that the appellant had not paid appropriate Service Tax and failed to provide supporting documents for exemptions claimed. 4. The Tribunal noted that the appellant's contentions required evidence appreciation and could be addressed during the regular appeal hearing. The Tribunal was not convinced by the appellant's prima facie case and observed that the appellant did not meet the criteria for dispensation of pre-deposit. 5. Section 35F of the Central Excise Act mandates depositing duty demanded or penalty imposed for appealing. However, undue hardship can lead to dispensation of such deposit. The Tribunal, in this case, dispensed with 75% of the duty demanded but required the appellant to deposit 25%, which was deemed reasonable. 6. The High Court upheld the Tribunal's decision to require the appellant to deposit 25% of the duty demanded. However, the Court opined that the Tribunal should have allowed the appellant another opportunity to make the payment before dismissing the appeal. The Court set aside the dismissal and granted the appellant six weeks to comply, after which the appeal would be heard on merits. 7. The judgment emphasized the importance of balancing the interests of the revenue and the appellant. It highlighted that strong prima facie cases may warrant unconditional dispensation of pre-deposit, whereas weaker cases necessitate securing the revenue's interest. The Court's decision aimed to ensure fairness and proper adjudication of the appeal. 8. In conclusion, the High Court partially set aside the Tribunal's order, giving the appellant a chance to comply with the pre-deposit requirement within a specified timeframe. The judgment underscored the significance of procedural fairness and the need to balance the interests of both parties in tax-related disputes.
|
